Levelling up: government accused of ‘badly neglecting’ rural areas with cities more likely to win funding bids

Councils in rural areas that produced bids for levelling up funding were less likely to have been awarded cash from four of the government’s main funding pots than their urban counterparts, NationalWorld can reveal.

The government has been accused of “badly neglecting” rural areas, and failing to account for the specific issues they face when allocating funding, either for levelling up or more broadly.

This comes as figures across local government have criticised the competitive funding system used to allocate billions of pounds to councils in England, with cash-strapped local authorities forced to spend millions in order to produce funding bids, in many cases unsuccessfully.

‘Badley neglected’

Since 2019, the Department for Levelling Up, Housing and Communities (DLUHC) has run a number of competitive bidding processes, with councils producing proposals for funding based on specific criteria to receive money from central government.

Based on data obtained by NationalWorld under the Freedom of Information Act (FOI) from 245 upper and lower-tier local authorities in England, we can reveal for the first time the vast amount of resources councils have had to deploy to bid for levelling up money, in some instances resulting in no return whatsoever.

The main four funding pots administered by DLUHC which have distributed cash to councils are the Community Renewal Fund (CRF), the Future High Streets Fund (FHSF), round one of the Levelling Up Fund (LUF) and the Town Deals. A small number of councils which responded to NationalWorld’s FOI requests also included the amount they have spent so far on producing bids for round two of the LUF, the winners of which are due to be announced imminently.

Using Office for National Statistics (ONS) classifications of rural and urban areas, which ranks areas as either predominantly urban, predominantly rural or urban with significant rural, our analysis shows urban areas have been markedly more successful in applying for funding.

Of the councils which spent money on consultants to either support or fully produce their funding bids, urban areas were significantly more likely to have their bids accepted than rural areas.

Just over three quarters (76%) of councils in predominantly urban areas were awarded cash from at least one of the funds, compared with fewer than half of those from predominantly rural areas. In total, urban areas had a success rate of 60% across all bids, compared with 40% in rural areas.

Factoring in councils which produced bids solely using internal resources, the disparity between urban and rural areas remains, albeit not quite as pronounced. Among urban areas, 55% of councils received money from at least one of the funds, and 34% of bids were successful, compared with 42% of councils and 27% of bids in rural areas.

Conservative leader of Derbyshire Dales council, Garry Purdy, said significant amounts of rural funding has been lost “going back decades” and that local government figures have found it difficult to express their concerns due to the “merry-go-round of ministers,” in recent years.

Speaking to NationalWorld, he said: “Rural areas have been badly neglected by government, and that’s why we’re struggling. We’ve got deprivation. I’ve got housing estates that I could show you, where there’s serious deprivation; mould in the houses and things like that. But these issues only seem to resonate when it’s in a city area.”

Rural councils spent more than £1 million on unsuccesful bids

Of the 12 highest spending councils that have yet to be awarded any funding from the funds analysed, five are classified as predominantly rural and two as urban with significant rural. This is despite there being more urban areas overall than rural and urban with significant rural areas combined.

Conversely, of the 12 councils which have been awarded the most money, 10 were in urban areas, and only two in rural areas, although one of these, Cornwall Council, saw the highest return overall of more than £100 million.

Derbyshire Dales Council did not apply for round one of the Levelling Up Fund, because it was not given enough notice to prepare a bid, but they have spent £300,000 producing a bid for round two of the fund. The winners of this fund are set to be announced imminently.

Torridge Council has spent £211,134 in total on three bids, but has been awarded no funding. The authority spent £149,955 on a Future High Streets bid, £51,179 on a round one Levelling Up Fund bid and £10,000 on a Community Renewal Fund bid - all of which were unsuccessful.

Tendring, Wyre and East Devon councils spent £364,207 between them on at least seven separate bids, all of which were unsuccessful. Among all rural areas, the total spent on unsuccesful bids was £1.4 million.

Shropshire Council has spent £107,672 on an unsuccessful round one Levelling Up Fund bid. Helen Morgan, Liberal Democrat MP for North Shropshire and the party’s spokesperson on levelling up, said the funding system “looks too crudely at indicators of deprivation”.

Morgan also questioned the level of transparency in the bid criteria and the awarding decisions. She said: “Places like Shropshire, which look very pretty but actually have some quite significant deprivation to deal with, seem to be put in this category of ‘green and leafy, not much help needed here’”.

In many cases, smaller local authorities in rural areas also struggle to put together bids due to insufficient internal resources or because they have less funding in the first place to risk producing bids. One senior councillor warned that many of these authorities are discouraged from bidding altogether because they don’t want to risk committing resources to a project with no guarantee of a return.

Cllr Kevin Bentley, chairman of the Local Government Association’s People and Places Board, said: “Competitive bidding for short-term, small pots of funding creates uncertainty and uses up vital resources in councils.

“In order to secure crucial investment, councils are required to chase after every pound, despite the challenging reality of delivering ambitious projects. Councils’ ability to pursue these bids varies significantly, with those with greater resources able to make speculative bids.

“This is not a sustainable approach to economic development or public service delivery. It falls short of the challenge set out by the Levelling Up White Paper and the ambitions of local leaders for their residents and places.

“The Government must boost local productivity and save money on costly competitions between areas, through building on the White Paper’s commitment to streamline the long list of individual local growth funds.”